May 21, 2013 | Branding, Category, Marketing, retail, Sales, Small business
I am old enough to remember doing warehouse withdrawals by hand. Heavens.
Then we had early data managers automate the process, an evolution that pottered on for 25 years, through to category management based on scan data, some of which can dive remarkably deep.
However, we ain’t seen nothing yet!.
The combination of retail data, personal card data, social media and the proximity capabilities of mobile applications will set off another revolution promotional and sales strategies.
Some of the technology is becoming pretty standard, the components of so called Big Data, and there is plenty around to tell you what to do, like this McKinsey article.
However, it takes resources and deep capabilities to effectively leverage the emerging possibilities, so how do SME’s compete?
It seems there are a few strategies that will become mandatory for those who actually want to survive:
- Develop scale. This does not just mean individual enterprises, which is by definition not possible for SME’s, but I see the emergence of “data co-operatives” groups of category marketers (some may even be competitors) who contribute to resourcing the necessary data science.
- Develop deep domain knowledge. This is like suggesting breathing is good for health, but the transitory and superficial culture surrounding product and brand management counters deep knowledge. This is a challenge of leadership, and personnel management, difficult topics for most businesses up to a substantial size. It is however, an opportunity to absorb the skills of the baby boomer marketers that are around, whose Intellectual Capital is becoming available for hire, as a contractor, consultant or often as a Director.
- Do extensive “Environmental Research“, and learn from what is happening elsewhere. For 30 years I have pretty well predicted what will happen in the Australian market by deeply engaging with 2 sources. Firstly the trends originating in the UK, which almost inevitably translate to the Australian scene at some point, and secondly being wrapped in social research, the stuff that details the behavior and attitudes of Australians. The original and still the best is the McKay Report. Hugh McKay has an enormous ability to articulate the complication of peoples lives and break them down into things you can use.
- Recognise and act on the simple truth that marketing is now fully accountable. No longer can marketers argue that the impact of their decisions are too hard to tie back to specific activities and costs. The ROI on marketing activity is now almost as transparent as that on capital expenditure, you just have to understand how to go about it, and get the right tools and capabilities in place.
- Differentiate. Notwithstanding the point above, you still need to stand out from the crowd, and the only way to do that is to be noticeably different, to engage with and serve consumers better than anyone else. The genuine creativity needed to do this will attract a premium, simply because it is so rare, and now the impact can be quantified, albeit after the fact.
Need help thinking about all that, give me a call, I have been there before.
May 19, 2013 | Governance, Leadership
This week we have had a budget, arguably the first half realistic assessment of the economy for some time, with some politically unpalatable pills swallowed. Not before time.
We have also had the budget reply, which was more an election speech than a roadmap for sensible governance, and government. We still know little about the priorities and relative weight the opposition gives to the many competing demands on the resources at their disposal via our tax payments, but we know a bit more now than before the speech.
Mr. Abbott put his finger on it when he recognised in his speech that if directors of a public company behaved like politicians, there would be some very serious questions asked by the regulatory authorities. We of the taxpaying classes have been saying that for years.
So, on the standards by which Directors are judged how has our government performed, on a scale of 1-5.
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- Formulation and execution of a strategic plan. 1/5. Comment. I see nothing that resembles a coherent plan that takes account of the short term bumps whilst assembling the capabilities and resources to deliver longer term prosperity in a volatile and commoditized world. Long term planning to this lot is what they are doing after (taxpayer sponsored) lunch. There are a few exceptions, some good intentions that may never emerge from the policy cocoon, which gave them the 1 point.
- Communication with, and alignment of, stakeholders to the strategic priorities outlined. 1/5. Comment. They get 1 because they did try, however ineffectively. The only stakeholders who appear to be aligned are the militant unions who have lined up to build back some of the rorts lost over the previous 15 years. Non public sector union membership is now around 10% of the workforce, yet they exert a huge influence on this government, way out of proportion to the numbers they supposedly represent. The internal alignment of management is appallingly bad, and has resulted in not just a trashing of the brand, but in having some useful talent and experience being relegated to the bench for speaking their mind. Successful leaders recognise that the debate around differing views, and the “due process” that is a part of creative and sensible policy development is vital, shooting the messenger went out with Al Dunlap.
- Development of sensible policy to deliver on the “vision” bits of the strategic plan. 3/5. Comment. The “policy” agenda of a government is equivalent to the components of the value proposition and business model of a commercial enterprise. Discussion of the current governments policy development performance could have a strong partisan element depending on your views. However, whatever your views on the individual components, I think it is fair to observe that they made considerable effort, carbon abatement via a tax regime, taxing mining profits beyond the existing tax rates, some substantial international initiatives, the disability scheme, the NBN, response to the initial impact of the GFC, and a few others. You may not like the individual policies, the implementation may have been be buggared, but the policy thought was there.
- Credibility. 0/5. Comment. Nobody I speak to believes anything coming out of the mouth of a pollie, of any persuasion. The spectacle of politicians and their mates who do not just stick their snouts into the trough, but dive in and wallow around has utterly tarnished the credibility of the whole lot. You can thank Obeid and McDonald et al in NSW, Thompson in Canberra, the sound of cabinet ministers dumping on the Rudster, who then squibbs, and absolute undertakings (as distinct from “election promises”) made and broken with monotonous regularity. The list goes on, and on.
- Performance compared to peers. 3/5. Comment. There is no doubt that Australia is in a far better position than most, if not all of economies that are reasonably comparable. The speed of Australia’s reaction to the GFC was commendable, and effective, although it can reasonably be argued that there was much waste involved. However, the financial flexability to make and implement decisions was a result of decisions taken by former governments, Hawke, Keating and Howard, and had little to do with the current regime. They just got lucky that there was money in the bank, and coal and iron ore prices went into a once in a generation spike. Discussion about how much better it could, perhaps should, have been done while being interesting, is irrelevant except as a learning experience.
- Productivity of our tax dollars, the outcomes we get from the spending. 1/5. Comment. Having run an agency outsourced from a Federal Department, and lived in Canberra for several years, I am particularly cynical about the manner of the expenditure that happens on our behalf. Everything costs many times what it should, and would under a different, more commercial performance and accountability culture. There is simply no bottom line culture of accountability, just spend what is allocated and fight like banshees for more, as size of budget and reporting numbers are the measures of seniority and therefore salary, and associated employment perks. Obviously this is a generality, there are many motivated, educated and engaged public servants around, trying to do a job, and being frustrated by the existing culture, and it is this culture that must change before any reasonable productivity progress can be made. It is in a word, a function of Leadership, a rare commodity it seems.
- Governance, finally. 0/5. Comment. As Mr. Abbot recognised, any CEO whose leadership had failed as conspicuously as that of the current and former PM would not just be out of a job, and be responsible for a trashing of the share price, but would be fronting the ASIC and its investigators for breaches of more regulations than Ian McDonald has had long lunches. (It should be noted, the opposition would also have problems with the regulators, as making public pronouncements of fantasy as fact when you are trying to get someone to buy your product is illegal)
All in all, a pretty sad state of affairs that no board would tolerate. A responsible board would have identified and eliminated the causes of such hubris well before it got to the stage on show in our various parliaments around the country.
The truly scary thing to consider is how much better the current opposition will perform when they, as it is almost assumed, take over the keys to the lolly cabinet in September. I fear they will be overcome by the same stuff that has sunk the current lot, and will just govern for themselves whilst mouthing platitudes.
None of this is to deny the difficulties of government, the competing agendas and political realities of the 24 hour news cycle, and our seeming intoxication with the banal, irrelevant, and superficial. However, it is our money that is being spent, we have a right, indeed obligation, to have our say.
How would you mark these parameters, and what other strategic considerations should be made that I have missed?.
May 15, 2013 | Governance, Leadership, Personal Rant
On this Budget “morning after” where public spending is at 33.5% of GDP and rising, all the debate is about the detail, weather or not the “baby bonus” should be retained, the validity of the forward estimates given recent history, and increase in the personal tax rate of 0.5% tearily described by the PM as just a small increase in the Medicare levy.
To my mind, we have missed the point.
It seems to me that a real problem in this country of ours is that we have allowed a culture to evolve that punishes errors of commission, those errant outcomes from someone actually taking some initiative, doing something, but getting it wrong. Sometimes they are the result of circumstances beyond their control, sometimes they just misjudge, and yes, sometimes, are just plain stupid, but at least they got off their arses and did something.
By contrast, we seem to just put up with those who do nothing but follow the party line, do as they are told, accept the status quo no matter how dumb they think it is, and just park their brains at the door.
Not the image we hold of ourselves.
The reality is about as far away from the bronzed Aussie gazing into the sunset somewhere harsh, taking all life can deliver with a grin and a stoic resolution to persist.
Perhaps it is about time we started focusing some light on those who did nothing, took no responsibility for their actions, and just sucked at the teat delivered on a platter.
Our public sector consumes well over 33% of GNP, yet produces nothing. Much of the money is necessary if we are to be a civilised society, but not all of it. The lack of productivity in the public sector is a national disgrace. Layers upon layers of paper shuffling, process management with little regard to outcomes, and meaningless KPI’s chased by intelligent, educated people, many of whom would love the opportunity to make change, but are prevented from doing so by the inertia of the system and prevailing culture.
The greater error should be the one of omission, not commission. How do we empower the bronzed Aussie of our collective imagination?. We should be seeking better outcomes for the money spent, not just arguing about the amount spent.
May 14, 2013 | Governance, Management, Operations, Uncategorized
I found myself in a heated debate last week with a headhunter about the value, and challenges of SME’s outsourcing the hiring of employees, particularly salespeople.
Her view: SME owners are so time constrained that anything not “core” to success should be outsourced, and left to professionals.
My view: If sales, or as I like to call it, Revenue generation, is not core to every SME, I do not know what is. Whilst it may be the product offering, that delivers the value, it is sales that delivers the opportunity to deliver that value, and therefore is the key role, and should warrant substantial attention. Picking those who will represent you with current and potential customers is much too important to be outsourced to “professionals” who get paid by delivering a body to a seat.
While there are exceptions at either end of the employee scale, casual factory workers are perhaps best outsourced, and it is probably sensible to have a headhunter exercise their skills and networks to find a group of people who fill demanding profile when seeking a new CEO, from which a board can make a choice.
However, this is not how it usually evolves. The usual is a harried, busy executive whose KPI’s have little to do with the quality of the team, and the individuals who make it up does not give adequate thought to the personal dynamics and capability requirements of the role, they just want a warm body that appears able to do the job in the seat ASAP.
Good salespeople make or break a business, the challenges in finding, keeping, and maximising their productivity are substantial, but are central to the success of the enterprise.
May 13, 2013 | Marketing, Small business, Social Media
Creating content, the stuff that engages people, preferably customers, potential customers, and influencers of these two groups people (otherwise why are you doing it?) is a real challenge, but one that successful use of social media demands is addressed. There are plenty of resources out there offering tips and templates, but they do not get the job done.
When you have addressed the challenges, and have great content, if nobody reads and shares it, why bother?
SEO tools also abound, just behind the seeming hordes of people offering to lift your Google ranking, for a fee. It seems to me that SEO has spawned a host of shysters matched only by the easy money opportunities emanating from Nigeria.
So where do you go in all this? How do you make the tough choices about how to allocate scarce resources? SEO or Content?
A couple of general thoughts that I have offered to clients over a while now, and which seem to work.
- Have very clear objectives. An investment in Social media is like any other investment, the first step is to be crystal clear about what it is you are trying to achieve. Setting out to get to the top of Google requires a different set of activities to engaging existing customers, building a position as an industry expert, or creating a sales pipeline. These objectives are not necessarily mutually exclusive, but using SEO strategies that build general awareness when you are looking for specific outcomes such as increasing your share of existing customers wallet, is as appropriate as taking the family car to a competitive hill-climb.
- Use analytics. Facts should always be the basis for decision-making, and the facts are there when you go looking for them. Marketing for the first time in its history as a profession can be held accountable to metrics that accurately measure outcomes, rather than just activity. It can be a daunting task, data analysis often can be to many, but there are free resources and tools available that offer an unprecedented accountability and transparency of marketing investments. A Google analytics dashboard at the very least should be compulsory. If you need a resource to assist your thinking, the very very, best is the Occum’s Razor blog written by Avinash Kaushik. A really good strategy is to take your device on holidays, and spend the week reading and understanding the stuff that Avinash writes. It is gold!
- Be prepared to experiment. Social media is a bit like the finches in the Galapagos, many may look the same at a fleeting and uninformed glance, but the detail of the evolution, the way individual groups have evolved to maximise their effectiveness in a specific environment is extraordinarily different. This has happened to the Galapagos finches over millennia, but is happening as we speak to social media tools and strategies, and the only way to leverage the specific circumstances you find yourself in, is to be completely agile, and committed to responding positively to changes in the environment and new information.
- Remove the rules and barriers to customer engagement. It can be confronting for many (particularly older, and dictatorial managers) to consider allowing personnel who actually interact face to face with your marketplace to have the authority to make decisions and respond on the spot to needs and opportunities as they emerge. Whilst there needs to be some general rules of engagement, that reflect the business model and values of the organisation, empowering employees can be remarkably effective.
- “Social” implies interaction.” Social media is a two way beast, whilst there is enormous potential to build value, the flip side is that the risks of social media becoming a problem are very real. The immediacy of the potential negative impact of social media needs to be recognised, and there needs to be very clearly understood strategies to deal with any such outbreak of negativity. If you cock up, social media can destroy you, particularly if you try and cover up the cock-up, and there is also the opportunity for malicious and competitive attack. This risk also needs to be acknowledged, and ideally “war-gamed” even if in a small way.
- We are stuck with Social Media. The final thing to remember is that Social media will not go away. We have seen it before, when Guttenberg got his press working, the world of the printed message changed forever, and it has happened again. Hoping it will go away, that the impact will not reach you is fantasy land, so get with the program, with all its challenges.
